Why Having Multiple Income Sources Is Critical
If there is one thing you want to be able to rely on in the world, it is your financial stability. No one wants to cope with the difficulty of transferring cash away from where they are needed only to keep afloat. With the future looking increasingly uncertain, having MULTIPLE INCOME STREAMS has never been more crucial! In the Richest Man in Babylon, George Clason mentions the secrets of becoming wealthy.
Residual Income, What Is It and What Are the Types
Let us start by defining active income and residual income. Active income is defined as earnings from a single day’s work. Thus, your active income is what you receive from your 9-5 work.
Unfortunately, most people's active salaries will not be significant. Typically, it is plenty to live on, with some money set aside for savings. As a result, we cannot rely on our active income to provide consistent and comfortable financial stability, and we must instead focus on developing residual income.
Making money on the side and accumulating additional assets generates residual income. Writing a book and collecting royalties from sales, for example, or investing in stocks or real estate. The finest residual income sources are those that can mainly take care of themselves with little to no participation from you. DO THE WORK, BUT FOCUS ON INCOME GENERATING ACTIVITIES, is my number one suggestion. You've heard my adage, "If it's not making money, it's not making sense."
Do Not Let Your Guard Down
However, it is critical not to get complacent! Relying on things to go well without personally supervising anything is a definite way to watch everything you’ve constructed crumble. It is critical to persevere early on and to pay close attention. The MORE work you put into building this stream, the LESS time you will need to spend supervising it after it is up and running.
Of course, different types of revenue need varying degrees of your commitment. Writing an eBook and making it available for purchase online needs significantly less administration than running a real estate firm.
So, now that you have a residual income, should you sit back and let it do all the work? NO! If the previous several years have taught us anything, it's that the future may be entirely unexpected. Nobody expected a worldwide epidemic to occur; what mattered was how you dealt with it.
That is why it is critical to have backup plans in place. As a result, having numerous streams of residual income is critical. It’s fantastic that you finished your eBook and that it's selling well, but there's no assurance that it will continue to sell well in the future! You should already be thinking about your next eBook as a way to supplement your income.
This article is part of our Business Coaching blog series. At Dataczar we talk to a lot of small businesses. We’ve found a few books that we keep recommending time and again. To better help our customers, we’ve added a Reading List for Small Businesses to our website. We encourage every small business owner to read and keep these timeless business books on their office shelf.